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When should you Assign an Account to a Collection Agency?

The best time to assign an account to a collection agency is when the debt is around 90 days past due.

Why 90 days?

  • You have given your debtor at least three billing cycles to pay the bill and resolve any billing disputes that may have occurred.
  • At 90 days, your efforts have been exhausted, and the account is clearly in the default territory. Your staff is spending more time and energy on reminding newer accounts that are around 30-60 days past due. 
  • Paying your bill is clearly not a priority in your debtor’s mind by now. ( or your patient’s mind, in case of medical debts). Chances of recovering money are dropping every day. A collection agency typically recovers 75% of your money when the account is assigned at 90 days.
  • Your internal staff is no match for a professional debt collector’s persistence and collection tactics. Your accounting department is unaware of collection laws that constantly change.
  • You can write off collection costs as business expenses in your taxes.
  • Quite likely your debtor likely has several other unpaid bills. A debt collector ensures that your bill becomes their top priority. You want to get paid before he wracks up more unpaid bills.
  • Assigning an account at 90 days to a collection agency will likely not alienate the debtor. He understands that you have given them enough time already. 
  • Your collection costs are lower:  You still have enough time to send Fixed-fee collection letters that cost a lot less than Contingency-based services. By spending about $15-$20 per account, you have an excellent chance to recover your money. Collection demands sent by a professional debt collector are a huge concern for your debtor versus when trying to collect by yourself. They will dig in all resources to get a collection agency off their back.

It is better to recover 75% of your money rather than take a 100% loss.

Need a cost-effective collection agency? Contact us

Filed Under: Debt Recovery

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    Note: Nexa is an information portal that helps businesses and medical practices to find a good collection agency at no cost to them. We are not a collection agency. We do not perform any collection activity, nor take payments, nor do any credit reporting. Leads shared with shortlisted agencies with Low Contingency Fee and High Recovery rates.

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    Copyright: Nexa Collections | 2023
    All information on this website is for general information only and is not an experts advice. We do not own any responsibility for correctness or authenticity of the information, or any loss or injury resulting from it. Nexa is not a collection agency. Relevant inquiries are contacted by our shortlisted collection agency partner(s)
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